Shares of AMC Entertainment continued to surge Wednesday, rising as much as 30% in premarket trading, as investors shrugged off a report that a hedge fund had sold its AMC stake.
On Tuesday, AMC reported it had sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital raises for the meme stock. The hedge fund later turned around and sold all of its AMC stock for a profit, according to a report from Bloomberg News.
AMC said in a securities filing that it raised $230.5 million through a stock sale to the investment firm. The movie theater operator said it would use the funds for potential acquisitions, upgrading its theaters and deleveraging its balance sheet.
AMC’s business was effectively halted during the pandemic, as cinemas were shuttered in most of the country for months. With no money coming in from ticket sales and concessions, AMC fell behind on its rent. On the brink of bankruptcy, short sellers swarmed the stock.
Retail investors have used their growing numbers fight back. Last week, investors shorting the stock were estimated to have lost $1.23 billion as the shares rallied more than 116%, according to data from S3 Partners. The stock is up more than 1,400% year to date.
The company has been making special efforts to communicate with this new investor base. On Wednesday, it said said it launched a new portal on its website for its retail investors. The site includes special offers including a tub of free popcorn.